xAI has acquired X, xAI now valued at $80B • Hacker News Board

Re: xAI has acquired X, xAI now valued at $80B

#801

Post by DannyBee » Sat, Mar 29, 2025, 2:05 PM UTC

charles_f wrote: post #431

rayiner wrote: post #182

Earlier quoted context omitted.

You’re burying the lede here, which is that the Delaware Chancery Court rules that Tesla had paid a fair price for Solar City: https://www.businessinsider.com/elon-musk-wins-solarcity-tes...

Arguably we'll never know. A court ruling that it's a fair price isn't the same as letting the market decide

This is true but it's not as far off as you think. In this case, the court doesn't have to just find it was a fair price, but a fair process as well.

That is, the standard the defendants have to meet (not the plaintiffs, the burden is actually on tesla here despite having been sued) is that the transaction was entirely fair to the corporation and shareholders- the process was a fair one, the price was a fair one, etc.

I have trouble thinking of a case where you can prove all this[1] but the market would have come up with something different. Almost by definition, if the market would have decided to pay a lower price, either the price or the process was probably not fair.

[1] Which again, you have to do affirmatively. You aren't just rebutting plaintiff evidence, the burden is on you to show the fairness

Re: xAI has acquired X, xAI now valued at $80B

#802

Post by onlyrealcuzzo » Sat, Mar 29, 2025, 2:06 PM UTC

echelon wrote: post #583

intuitionist wrote: post #379

Earlier quoted context omitted.

The outside investors in X made a profit on paper; Twitter was bought for $44B but the deal was financed with like $31B in equity and $13B in debt. It’s not a big profit (in fact it’s worse than you would have done in T-bills), and of course they’re swapping one illiquid and hard-to-value asset for another, but Elon isn’t giving them a 25% haircut at all.

Even if he made the Twitter investors whole, I wonder how the investors in xAI feel.

They feel great, because he just magically turned a ~50% loss in Twitter into a ~50% return in xAI and a ~0% loss in Twitter.

Of course, you can't buy $20B worth of mangoes for $40B worth of Mango Holding Company stock and then suddenly make your mango-holding business worth twice as much money.

But you can pretend!

Private valuations, especially VC-funded companies, have been nonsense for decades. Elon is just exploiting that egregiously.

Re: xAI has acquired X, xAI now valued at $80B

#803

Post by pqtyw » Sat, Mar 29, 2025, 2:11 PM UTC

permo-w wrote: post #332

legendofbrando wrote: post #301

In similar news: my left hand acquired my right hand today in an all stock deal valuing the combined hands at $1T. Praising the announcement my arms noted on the deal: “With these two hands now together, there’s nothing our combined fist of might can’t do.” Competitors, my left and right feet, declined to comment on the merger but are said to be in their own separate talks about a deal.

right but you don't have $1T to do that, whereas clearly he has however much money he's paid for it. it's a weird thing to do, but if he has the money to do it then meh?

Except there is no money involved. xAI has nowhere near that amount of money in cash or in any liquid assets. The valuation hardly means anything, it might be worth $10 billion, it might be worth $100 billion nobody can tell at this point.

Re: xAI has acquired X, xAI now valued at $80B

#804

Post by pqtyw » Sat, Mar 29, 2025, 2:12 PM UTC

kristjansson wrote: post #645

permo-w wrote: post #332

Earlier quoted context omitted.

right but you don't have $1T to do that, whereas clearly he has however much money he's paid for it. it's a weird thing to do, but if he has the money to do it then meh?

"I merged my checking account ($X) with my savings account ($Y) in an all cash deal valuing the combined entity at $X+Y"

Presumably that involved actual money unlike this deal?

Re: xAI has acquired X, xAI now valued at $80B

#805

Post by HWR_14 » Sat, Mar 29, 2025, 2:12 PM UTC

silisili wrote: post #675

HWR_14 wrote: post #668

Earlier quoted context omitted.

How did he get the tens of billions in cash he personally put in if not leveraging Tesla. Yes he had minority investors and put some debt on the acquisition itself, but he put up a lot of money.

He sold Tesla shares. This is all public, I don't understand the weird speculation...

He also sold a ton of shares. But not enough to cover all the money he needed to put into Twitter.

Re: xAI has acquired X, xAI now valued at $80B

#806

Post by trollied » Sat, Mar 29, 2025, 2:14 PM UTC

cma wrote: post #777

twothreeone wrote: post #615

Earlier quoted context omitted.

There's two issues with that theory: (a) Somebody in another thread mentioned that margin for those loans would trigger at around $120, so assuming that's true TSLA has another 50% to lose before it would happen. (b) Even if that was the case and TSLA lost those 50%, that would mean he'd have to cover the loans with cash. He cannot use xAI shares for that because contrary to TSLA it is not a publicly traded company.…

Twitter started with $13 billion in debt and now has $12 billion, so was only able to make $1 billion in profit in about two and a half years. Twitter was making around $500 billion a quarter before the Apple ad targeting changes that Meta was able to recover from back to more than their profitability before the changes, so if Twitter only got back to ~$100 billion a quarter they failed pretty hard in comparison to M…

> Twitter was making around $500 billion a quarter

Huh?

Re: xAI has acquired X, xAI now valued at $80B

#807

Post by pqtyw » Sat, Mar 29, 2025, 2:15 PM UTC

mingus88 wrote: post #87

saaaaaam wrote: post #48

So he just sold himself a company he already owns for a valuation that he himself assigned to that company but that was less than what he paid for it, and he paid entirely using “money” that has a made up value and which he issues himself? Wild.

Yeah these fantasies where musk would somehow go bankrupt by tanking Tesla and overpaying for Twitter were also wild He’s literally the richest person the earth has ever known. He’s never going to suffer financially. He has countless levers of power he can pull. The same fantasy applies to any past or current president ever spending a day in jail. He literally commands the most powerful military apparatus the world h…

> He’s never going to suffer financially

Well his wealth can decrease by 200x and no sane person could claim that he's "suffering" financially with what he has left.

> somehow go bankrupt .. were also wild

That depended entirely on how Tesla's stock performed. If he had to liquidate $20 billion of his stocks to pay back the Twitter loans his wealth would have decreased by much, much more than that.

Re: xAI has acquired X, xAI now valued at $80B

#808

Post by franktankbank » Sat, Mar 29, 2025, 2:15 PM UTC

Hasnep wrote: post #396

thanhhaimai wrote: post #136

This move makes it more likely that the internal number for TSLA is not good, and Elon is expecting the price to go down. He has access to the real revenue number. If it's going well, he wouldn't have to perform this maneuver. xAI was relatively separated from X and TSLA, and wasn't having the backlashes associated with the two. Now he risks having the xAI branding tarnished too. He wouldn't do this unless the TSLA i…

> more likely that the internal number for TSLA is not good The external number for TSLA is not doing very good either

Still higher than just 1 year ago. Still vastly overpriced.

Re: xAI has acquired X, xAI now valued at $80B

#809

Post by phillipcarter » Sat, Mar 29, 2025, 2:16 PM UTC

sunaookami wrote: post #27

zitterbewegung wrote: post #21

Earlier quoted context omitted.

That and the data that is a part of X can be used by the xAI team. I expect it will be in the TOS if it isn't there already. "xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent."

There is a setting (opt-out outside of EU, opt-in inside EU I think) that allows/forbids data sharing with X since Grok was released.

Oh yes, you can definitely be reassured that Elon and his openai dropouts working at xAI will follow that one to the tee.

Re: xAI has acquired X, xAI now valued at $80B

#810

Post by jeff_carr » Sat, Mar 29, 2025, 2:17 PM UTC

minwcnt5 wrote: post #199

saaaaaam wrote: post #48

So he just sold himself a company he already owns for a valuation that he himself assigned to that company but that was less than what he paid for it, and he paid entirely using “money” that has a made up value and which he issues himself? Wild.

This also lets all of his co-investors in X, who were likely pissed that their shares tanked, exchange their shares at an inflated value (but one that still sees them losing 25% of their original investment) for shares in a trendy yet likely overvalued AI company that they consider to have more upside. The other part of this is that if TSLA stock drops to $100-ish he'll be at risk of being margin called on the loans…

> This whole thing seems like a big pyramid scheme.

That's because his scam of charging $8k over the price of a Tesla for "self driving" was complete vaporware. It never worked and it never was going to work. I am disappointed I fell for it.

There should be a class action lawsuit against TESLA for everyone that purchased the $8k self driving "feature". We were all told it was "being rolled out". It was a total lie.